For Official Use Only CLR Review Independent Evaluation Group 1. CAS/CPS Data Country: Lao Peoples Democratic Republic (Lao PDR) CAS/CPS Year: FY12 CAS/CPS Period: FY12 – FY16 CLR Period: FY12 – FY16 Date of this review: March 24, 2017 2. Ratings CLR Rating IEG Rating Development Outcome: Satisfactory Moderately Satisfactory WBG Performance: Good Good 3. Executive Summary i. Lao PDR is a small, landlocked, lower middle income country that for some years has enjoyed rapid economic growth (around 7.8 percent over the past decade including the CPS period). In 2015, GNI per capita was $1,740, which was below Vietnam ($1,990) but well above Cambodia ($1,070). While poverty has been reduced, inequality has been rising and growth has not been inclusive. The latest available Gini index of 37.8 in 2012 shows a noticeable increase from 34.6 in 2002. For the same period, Lao PDR Gini index is about the same level as Vietnam (38.7), but much higher than Cambodia (30.7). ii. Lao PDR has been achieving its high economic growth rate through a structural shift from agriculture to resource based growth, benefiting from its abundant natural resources (hydropower, forestry and mining), which have been the subject of large inflows of foreign investment. The dependence on this sector for growth raises increasingly important issues of environmental sustainability. The shift of labor out of the agricultural sector has been slow, however, with the sector still accounting for 64 percent of the workforce, making Lao PDR one of the most agrarian economies in East Asia. The sectoral shift has been hampered by the low and stagnant agricultural productivity. iii. While some of the Millennium Development Goals have been achieved (such as extreme poverty and hunger), there are persistent problems with high rates of malnutrition and stunting, infant and maternal mortality, and school dropouts. The conditions for private business remain challenging - Lao PDR is ranked 139th out of 190 economies on the 2017 Ease of Doing Business, a drop by 5 positions from the 2016 Doing Business ranking. iv. The WBG’s Country Partnership Strategy (CPS) supported the implementation of the government’s seventh National Socio-Economic Development Plan (NSEDP) whose objectives were to achieve the Millennium Development Goals (MDGs) and to graduate from Least Development Country status by 2020. While this was a joint WBG CPS in Lao PDR, the program was largely about the Bank with a modest role for IFC, primarily focused on advisory services. The program did address key priority areas in the country, but given the limited IDA envelope and institutional capacity issues, it was not well focused and too wide ranging; and did not have as much depth as would have been desired. CLR Reviewed by: Peer Reviewed by: CLR Review Coordinator/Manager Nils Fostvedt Albert Martinez Zeljko Bogetic Consultant, IEGEC Consultant, IEGEC Acting Manager, IEGEC Nathaniel Jackson Lourdes N. Pagaran Consultant, IEGEC CLRR Coordinator, IEGEC CLR Review For Official Use Only 2 Independent Evaluation Group v. The CPS focused on stronger public sector management as a cross-cutting theme, with three strategic thematic areas: competitiveness and connectivity, sustainable natural resource management, and inclusive development. The CPS and the CPSPR addressed important priorities and drew on lessons from the previous program, including on the critical importance of capacity building that needed to be embedded into broader sectoral programs rather than through separate activities. However, it is not clear to what extent the program actually succeeded in this regard, and only a few of the objectives and/or outcome indicators in the CPS/CPS Progress Report results matrix seem to relate to capacity building. vi. Two of the four focus areas are rated Moderately Satisfactory, and the other two are rated Moderately Unsatisfactory (Focus Areas 2 and 4). Overall, of the 11 objectives, one was achieved (Increased access to improved infrastructure services in transport and energy), five mostly achieved and five partially achieved. On balance, IEG rates the development outcome as Moderately Satisfactory. vii. During the period FY12-16, IDA approved 17 operations (including additional financings) for a total amount of $331 million, of which the largest were for power grid, poverty reduction fund and integrated water resource management. The program was supported by a limited IDA envelope and complemented by a large number of grants and trust funds, and a substantial knowledge program. The majority of IFC’s approvals during the CPS period were in the financial sector, together with a substantial program of advisory services, but there was only a modest role for IFC in the results framework. viii. IEG draws four main lessons from the experience with this CPS: (a) Program design matters, with attention to focus and selectivity and to achieving development results. In this case the program was probably too broad, which may have been at the cost of in-depth impact; (b) Bank and IFC collaborations on specific operations can be useful to drive reforms forward, but need to be properly planned for and accounted for in the results frameworks; (c) It is preferable for results frameworks to incorporate all major areas of the program, and in reporting on results frameworks; it is equally important to ensure that all results, including numerical results, can easily be accounted for including for validation purposes. This was not always the case here. (d) From the still ongoing Nam Theun 2 social and environmental project, a lesson is that the Bank’s safeguard requirements for high risk operations can work, with the help of attentive Bank supervision, but may require close attention throughout the life of a project. ix. The CLR also presents the following lessons with which IEG agrees, although some of the lessons seem more appropriate for specific operations: (i) Considering political economy factors as drivers of government ownership and commitment is critical for program design. (ii) A strong consolidated program of ASA is a key strength of the CPS and highly valued by the client. (iii) Presence and program leadership on the ground provide immediate and prompt response to client needs and emerging opportunities. (iv) Engagement is critical in community-driven interventions, and it is as important as the provision of infrastructure. 4. Strategic Focus Relevance of the WBG Strategy: 1. Congruence with Country Context and Country Program. The WBG’s Country Partnership Strategy (CPS) supported the implementation of the government’s seventh National Socio-Economic Development Plan (NSEDP) (2011-2016), whose objective was to achieve the Millennium Development Goals (MDGs) and to graduate from Least Development Country status by 2020. The CPS and CPSPR, which remained largely unchanged, focused on stronger public sector management as a cross-cutting theme along the three strategic thematic areas: competitiveness and connectivity, sustainable natural resource management, and inclusive development inclusive health and education. This strategy was well aligned with country challenges and the government’s objectives. 2. The WBG program was highly relevant in relation to the country context. The program objectives were in line with and in support of the country’s stated development goals. Well before the CLR Review For Official Use Only 3 Independent Evaluation Group CPS period, the country had embarked on a path of exploiting its abundant natural resources to achieve rapid economic growth, which continued during the CPS period. Lao PDR’s average annual GDP growth rate in 2012-15 was 7.9 percent, but with a rate of just under 7 percent projected for 2016- 17. The country also experienced significant progress in poverty reduction, with the poverty headcount having declined from almost half the population to below one quarter within a decade; but, these averages masked geographic and ethnic disparities. The national Gini coefficient has increased significantly (from 0.34 in 2002 to 0.37 in 2012). 3. Lao PDR achieved significant progress on the MDGs, including its targets for poverty reduction and under-five mortality; but, problems remain in several important areas. The nutrition target was off track with stunting in children remaining one of the biggest challenges, and the country has some of the highest under-five and maternal mortality rates. While there is steady progress towards universal primary education coverage, the drop-out rates are high and the secondary enrolment rates are low. 4. Agriculture represents 64 percent of the country’s workforce, making Lao PDR one of the most agrarian economy in East Asia, but productivity in the sector is low and has not increased significantly. Outside of agriculture there are also problems with the quality of the labor force, with many workers lacking foundational skills such as the ability to read. 5. Relevance of Design. The program addressed important priorities and drew on lessons from the previous program. The program was prepared for the WBG (largely the Bank) to support the continuation and broadening of rapid growth in GDP while strengthening governance and addressing social and environmental sustainability and support for disadvantaged areas. Support for the objectives included ongoing and new lending activities and a broad range of knowledge products that seemed often to be well integrated. The areas of engagement were appropriately selected. However, under focus area 4, the linkages between the Bank instruments, objectives and indicators are unclear, as is the extent to which the Bank’s own interventions affected broader macroeconomic policies. 6. One of the lessons from the previous program had been the critical importance of capacity building that needed to be approached differently – to embed it into broader sectoral programs rather than through separate activities. The CLR provides a number of examples of technical assistance that supported a deepened understanding of key challenges, but without a good synthesis of results and lessons. It is therefore not fully clear to what extent the program actually succeeded in embedding capacity building into broader sectoral programs, and only a few of the milestones in the CPSPR results matrix seem to relate to capacity building. The CPS program and results matrix were presented in the context of broader intentions – areas of directions that the WBG intended to work towards. These were in places significantly broader than the formal results framework itself. The latter is discussed later in this Review. Selectivity 7. The CPS/CPSPR program could have been more selective. It addressed key development issues and objectives based on country and sector diagnostics. It was, however quite fragmented for a small country with limited institutional capacity. Most of the 11 objectives and 27 indicators were consistent with WBG’s comparative advantage and capacity, and were based on country experience and diagnostics. There was however quite a modest role for IFC, while as mentioned above the public sector management area covered macroeconomic and public financial management issues that presumably would also be addressed by the IMF and other development partners such as ADB. The CPS discussed the close interactions with traditional and some emerging donors, but the document did not identify any resulting specific areas of WBG non-engagement to avoid overlaps. Alignment 8. While the program was developed before the introduction of the WBG’s twin goals, it was aligned well with these goals. The CPS focused on poverty related issues and on maintaining sustainable growth that contributes to poverty reduction. In IEG’s judgment, about one-third of the indicators were focused directly on the poor/disadvantaged and/or rural areas where much of the remaining poverty is concentrated. However, the program could have been even more focused on CLR Review For Official Use Only 4 Independent Evaluation Group agricultural productivity (only one indicator in the program) and on direct poverty alleviation issues for health, education or nutrition. 5. Development Outcome Overview of Achievement by Objective: 9. Following the shared methodology, the assessment of the development outcomes is based on the CASPR framework. There were four focus areas (or strategic objectives) with a total of 11 objectives (or result areas). One of the four focus areas – stronger public sector management - was described as a cross-cutting theme, but with no clear indications in the matrix of cross-cutting aspects. The other three result areas were for competitiveness and connectivity, sustainable natural resource management, and inclusive development. Annex 1 provides details of the program’s achievements. IFC was not included in the results framework of the CPS/CPSPR in any meaningful way. A number of possible activities were listed, largely pro forma, and with unclear relations to the specific objectives. Given this approach in the results framework, the actual IFC activities are noted in the appropriate focus areas. Focus Area 1: Competitiveness and Connectivity 10. The focus area was underpinned by two objectives and a total of six indicators and supported by a number of lending and ASA activities, most importantly the Customs and Trade Facilitation project, the Second Trade Development Facility project, the Road Sector project, and the Rural Electrification phases 1 and 2 projects. 11. Objective 1: Strengthened government capacity to support growth diversification and competitiveness. This objective had three indicators that together covered only a modest spectrum of the stated objective: Indicator (i): Mean number of days to import (number of days from arrival of goods to customs release): The targeted reduction (from 5.7 to 2 days) was Achieved, albeit one year late. Indicator (ii): Percentage of inbound cargo subject to physical inspection: Mostly Achieved. The percentage was targeted to be reduced from 100 percent to 40 percent. The CLR indicates a reduction to 52 percent by 2015, which IEG could not verify. Subsequent information provided by the Bank team shows a reduction to 52 percent between October 2013 and September 2014, with a tentative further reduction to 50 percent up to July 2015 indicating a trend line towards further reductions. Indicator (iii): Mean number of days to obtain an operating license: Mostly Achieved. The CLR reports during the CPS period a modest decline from 17.7 to 16.3 days, per the Lao Enterprise Surveys of 2016, short of the target of 15 days. The project ISRs use a different number – mean for services firms only – which now stands at 12.6 days. On balance, Objective 1 was Mostly Achieved. However, while the indicators measure the competitiveness aspect and about the ease of doing business, there are no measures or evidence that indicates government capacity to support growth diversification. 12. Objective 2: Increased access to improved infrastructure services in transport and energy. The objective had three indicators that covered reasonably well the objective: Indicators (i) Improved road services and sustainability of road investments as measured by km of upgraded national roads, and (ii) percent of provincial roads in good and fair condition. Targets for both indicators were Achieved. It is noted that the indicators for this program objective are outputs (versus outcomes) and are more modest than the objective of the Road Sector project that supports this objective (such as reduction in travel time or access). Indicator (iii): Increased access to electricity by the rural households in villages in project provinces, as measured by number of new households electrified (grid and off grid) under Rural Electrification program (REP I and REP II). The targets were Achieved for both indicators. Overall, with all three indicators achieved Objective 2 was Achieved. 13. On balance, with one Objective achieved and one mostly achieved, this focus area was Moderately Satisfactory. 14. IFC had ten advisory projects directly or indirectly supporting the investment climate, plus one on financial sector reform and one transportation advisory project. IFC has been working to introduce a new credit reporting system and to form a joint stock entity with a private sector partner to provide CLR Review For Official Use Only 5 Independent Evaluation Group credit reporting services. It has also provided training to government officials (with additional funding from the British government). Focus Area 2: Sustainable Natural Resource Management 15. This focus area was meant to strengthen governance and management of the hydropower and mining sectors, including sustained Nam Theun 2 implementation. The focus area was supported by three objectives and eight indicators, and through a number of WBG activities including the ongoing Nam Theun 2 Environment and Social project, TA for Capacity Development in Hydropower and Mining sectors, and two Environment and Social projects. 16. Objective 3: Strengthened governance and management of hydropower and mining sectors, including Nam Theun 2 (NT2) implementation, with two indicators: Indicator (i): Core standardized terms and conditions for hydropower and mining investment agreements adopted. Partially Achieved. Mining Development Agreement was submitted to the government for approval in August 2016, while the Standard Environment and Social Obligations are still being worked on. Indicator (ii): NT2’s resettlement implementation program successfully concluded by 2015. Mostly Achieved. The CLR reports that 97 percent of the resettled households have reached the income target, while the ISR for the project supporting this objective reports that all but three percent of re- settlers are receiving support. However, it should be noted that the two indicators do not cover a number of important areas for the governance and management of the hydropower and mining sectors. With one indicator mostly achieved and one partially achieved, Objective 3 has been Partially Achieved. 17. IFC has been working towards improving the implementation of policy and regulatory frameworks to promote implementation of best practice environmental and social standards in the hydro sector, but approvals and implementation of these new policies have been slow due to lack of capacity and other constraints to implement the project. 18. Objective 4: Sustainable environmental, social and water resources management, with three indicators: Indicator (i): Provincial departments (PONRE) of NRE (Natural Resources and Environment) established and functioning in selected provinces. Achieved. The CLR reports that PONRE were established and functioning in 17 provinces as of 2013, against a target of five as per 2015. IEG’s ICRR reports the establishment of PONRE in selected provinces to manage environmental and social impacts. Indicator (ii) Percent of concession agreements for hydropower projects signed after the effectiveness of the new EIA (Environmental Impact Assessment) decree (March 2010) that include standardized environmental and social requirements: Achieved. According to the CLR the target (60 percent) was achieved, and the percentage of concession agreements went from 80 to 100 percent. IEG ICRR reported that 21 hydropower concession agreements were signed after 2010, all of which contained standard environmental and social obligations. The basis for the derivation for the percentage could not be verified from the project documents. Indicator (iii): Water Law (1996) revised and approved by 2015. Partially Achieved. The water law was revised and is planned to be resubmitted in 2017. 19. With two indicators achieved and one partially achieved, this objective was Mostly Achieved. 20. Objective 5: Sustainable management and protection of forests and biodiversity, with three indicators: Indicator (i): Number of management plans developed and approved at national level for National Protected Areas (NPA) and Production (PFA) and Protected Forest (PF) areas. Partially Achieved. Data provided in the ISR for the Scaling-Up Participatory Sustainable Forest Management project does not give disaggregated data. It reports that Forest Management Plans covered 40 of 41 PFAs; but no information is available for NPA and PF areas. The CLR reports that 1 NPA by 2016 (target in 2015 of 3), 39 PFA (target of 20), and 0 PF (target of 2) – and that the 39 PFAs were approved in December 2016. Indicator (ii): Number or percent of co-management/community agreements signed and acknowledged at national government level. Not Achieved. The CLR presented numbers that indicated some progress but well short of the targets, and these numbers could not be verified from the available documentation. Indicator (iii): Benefit-sharing mechanisms designed and implemented: Partially Achieved. The CLR reports numbers that indicate modest CLR Review For Official Use Only 6 Independent Evaluation Group numerical progress, whereas the ICRR (using 2015 data) reported that “while the initial guidelines for revenue generation and benefit sharing were developed and applied”, the “revised benefit sharing arrangements have not yet been applied.” With these three indicators the objective was Partially Achieved. 21. With two objectives partially achieved and one mostly achieved, this focus area was Moderately Unsatisfactory. Focus Area 3: Inclusive Development. 22. This focus area would support increased utilization and quality of essential maternal and health services, as well as access to and quality of primary education in targeted, disadvantaged areas. It had three objectives and eight indicators, supported by the following interventions: Health Services Improvement project, the Second Education Development project, the Catalytic Fund EFA/FTI, the Khammouane Development Project, the Rice Productivity Improvement project and the Poverty Reduction Fund II. 23. Objective 6: Increased utilization and quality of essential maternal and child health services. There was only one indicator for this objective which gave a measure of utilization of birthing services, while there was not a separate indicator about their quality – the team claims that the chosen indicator could cover both utilization and quality. (The associated milestone also related to utilization of birthing facilities.): Indicator (i): Percentage of births attended by trained health personnel. The target was an increase from 35 percent in FY10 to 50 percent by 2015. According to the additional information provided by the team, this percentage was exceeded in 2015. However, it should be noted that the latest data from the World Development Indicators show a 42 percent rate of utilization for Lao PDR in 2012. The CLR gives the percentage of 50 percent by 2015, but the basis for that number could not be verified. The ICRR (rated MU by IEG) for the Health Services Improvement project reported deliveries in health facilities at 39 percent in 2015. On balance, given this additional information, the indicator and thus objective 6 were Mostly Achieved. It would have been preferable to have a separate indicator for the quality of essential maternal and child health service, rather than assuming that the quality would increase with the greater use of trained birth attendants. 24. Objective 7: Expanded access to and improved quality of primary education in targeted, disadvantaged districts. This objective was underpinned by three indicators: two measuring increased access by children in rural communities in priority districts, and one concerning the quality of education: Together, these three indicators demonstrate good practice of designing and measuring progress of program objectives. Indicator (i): Primary completion rate in 56 targeted (disadvantaged) districts. Achieved at the targeted 64 percent already early in the period (up from 54 percent in 2008/09). Indicator (ii): Number of students enrolled in primary education in targeted districts. Partially Achieved. The CLR reported the number of enrolled students by 2015 at 324,740 of whom 47.4 percent female, 92 percent of the targeted 353,000 by 2012-13 of whom 47 percent female. Indicator (iii): System for learning assessment fully operational by 2013. Achieved. The system was in place and functional by 2012/13. 25. Two of the three indicators were achieved and one partially achieved, hence objective 7 was Mostly Achieved. 26. Objective 8: Improved access to basic services and markets and community participation in rural areas. This objective was underpinned by four indicators that together reasonably covered the objective: Indicator (i) Number of direct beneficiaries of targeted programs. Achieved. Target (2016) of 184,000 beneficiaries was met with a comfortable margin – 205,366 beneficiaries in 2016 as per the CLR. Indicator (ii): Increased production of rice seed (R1, R2 and R3) in participating areas. Partially Achieved. The ICRR for the Rice Productivity Improvement Project shows a substantial increase in annual rice seed production, but at levels far below the baseline and target levels reported in the CLR, numbers that could not be validated from the available information, but that do show an increase. Indicator (iii): Number of communities able to plan, implement and monitor their activities. Achieved. The target was for 270 communities to do this by 2015 – under the second Poverty Reduction Fund only. The CLR reports 278 villages, whereas the CLR Review For Official Use Only 7 Independent Evaluation Group ISR reports a much larger number – 1,124, but not limited to the second project. However, while IEG could not validate the precise CLR number, the high broader ISR number indicates that the target has been met. Indicator (iv): Adoption of participatory planning processes by communities and district and provincial authorities. Achieved, based on the ICR for the Poverty Reduction Fund II project and additional information provided by the team. For this objective three indicators were achieved and one was partially achieved. Overall, objective 8 was Mostly Achieved. 27. In this focus area, two objectives were mostly achieved and one was achieved. On this basis the focus area was Moderately Satisfactory. Focus Area 4: Cross-cutting area: Stronger Public Sector Management . 28. The WBG had identified institutional capacity in the public sector as a cross-cutting challenge, limiting the government’s ability to design and implement its programs. The Bank considered that the achievement of all the strategic objectives in the program would require some strengthening of public sector management, and capacity building was supposed to be embedded in sectoral programs. Any linkages to such activities were not apparent in this focus area, which was supported directly by three objectives and five indicators. Important supporting operations included Strengthening the National Statistical System project, the Eighth and Ninth Poverty Reduction Support operations (PRSOs), and the Public Finance Management Strengthening program. 29. Objective 9: Strengthened government capacity for macroeconomic management and policy coordination. This objective was supported by two important indicators: Indicator (i): Quality of macroeconomic policies and management as indicated by: Macroeconomic policies including debt management policy responsive to natural resources sector developments and coordinated in a way that maintain internal and external balances. This was to be measured through a budget deficit as a percentage of GDP and inflation below rate of economic growth. While these indicators measure important aspects of macroeconomic policies, these were clearly higher level indicators that are affected by factors beyond the Bank’s own interventions. The indicator was Achieved – as reported in the latest IMF Article 4 report the budget deficit was below 5 percent every year 2011-15 except for 2013, and with as little as 2.7 percent in 2015 (but is now projected to increase to above 5 percent in 2016 and 2017), and annual average CPI showed a declining trend (with a jump in 2013) to 1.3 percent in 2015 (although now projected to increase again modestly). However, as noted in the ICR for the Eighth and Ninth Poverty Reduction Support operations, which were rated Moderately Unsatisfactory, there was no direct prior action or trigger to maintain the fiscal deficit below the 5 percent limit; hence raising the issue of attribution. Indicator (ii): CPIA Macroeconomic Management cluster should improve from 3.36 (2011) to above 3.7 (2015). Not Achieved. The CLR reports that this CPIA cluster remained at 3.3. With one indicator achieved and one not achieved, Objective 9 was Partially Achieved. 30. Objective 10: Strong linkages between planning, fiscal, borrowing strategy, and annual budgeting. The achievement of this objective was to be measured by the Indicator (i): Ensuring that the eight National Socio-Economic Development Plan (NSDEP8) would be anchored within a medium term budget framework. There was no medium term budget framework in 2011; the target was for NSDEP8 to contain a medium term fiscal framework with a discussion of medium-term macro-fiscal framework (2015). The ICR for the Ninth Poverty Reduction Support operation reported that in 2015, NSEDP8 included a very basic framework, and that a slightly more elaborate framework was presented to the National Assembly as part of the revised budget preparation process. On this basis the indicator was Partially Achieved. Objective 10 was also Partially Achieved. 31. Objective 11: Improved financial management for appropriate revenue management . This objective was underpinned by two indicators: Indicator (i): Improve tax policy and administration as demonstrated by an increase in the revenue to GDP ratio. Baseline was 15 percent (2010) and target) (2015) was 18 percent or above. The CLR reports that the revenue to GDP ratio was around 18.4 percent in 2015. The latest IMF Article IV report (2017) also shows revenues (exclusive of grants) of 19 percent for 2015. Achieved. Indicator (ii): Enhance fiscal transparency and external oversight. Not Achieved. There was no specific indicator measurement, but two milestones: (i) By 2015 budget execution reports for central government and provinces published within one-quarter of the end-of- CLR Review For Official Use Only 8 Independent Evaluation Group period. (ii) Audit report for budget execution by 2015 to cover entire central government and provincial expenditures and published with key findings annually. The CLR only reports on the second of these two milestones, which was not achieved. Objective 11 was Partially Achieved. 32. For this focus area all three objectives were partially achieved. On this basis, the focus area was Moderately Unsatisfactory. 33. Since 2009, IFC has been working with the Lao Tax Department to improve the overall tax regulatory environment for small and medium enterprises, and it advises the government on developing business-friendly laws and regulations by increasing transparency, cutting red tape, and creating equal opportunities for investors. IFC has assisted in improving tax compliance and administration by simplifying tax regulation procedures. 34. Overall Assessment and Rating: Focus Area 1 (Competitiveness and Connectivity) was Moderately Satisfactory, with one of the objectives (increased access to improved infrastructure services in transport and energy) achieved. Focus Area 2 (Sustainable Natural Resource Management) was Moderately Unsatisfactory, although objective 3, which included Nam Theun 2 (NT2) implementation, was mostly achieved. Focus Area 3 (Inclusive Development) was Moderately Satisfactory, , while Focus Area 4 (Cross-cutting area: Stronger Public Sector Management) was Moderately Unsatisfactory. The WBG had identified institutional capacity in the public sector as a cross-cutting challenge, with capacity building supposed to be embedded in sectoral programs. While additional examples were provided by the team, any linkages to such activities were not apparent in focus area 4 of the program. Additionally, there were also weak linkages between the program objectives and indicators and the Bank’s interventions which raises the issue of attribution. Overall, of the 11 objectives, one was achieved, five mostly achieved and five partially achieved. On balance, IEG rates the development outcome as Moderately Satisfactory. Objectives CLR Rating IEG Rating Focus Area 1: Competitiveness and Moderately Connectivity Satisfactory Objective 1: Strengthened government Mostly Achieved Mostly Achieved capacity to support growth diversification and competitiveness Objective 2: Increased access to improved Achieved Achieved infrastructure services in transport and energy Focus Area 2: Sustainable natural Moderately resource management Unsatisfactory. Objective 3: Strengthened governance and Partially Achieved Partially Achieved management of hydropower and mining sectors, including sustained Nam Theun 2 implementation Objective 4: Sustainable environmental, Mostly Achieved Mostly Achieved social and water resource management Objective 5: Sustainable management and Not Achieved Partially Achieved protection of forests and biodiversity Moderately Focus Area 3: Inclusive Development Satisfactory Objective 6: Increased utilization and quality Achieved Mostly Achieved of essential maternal and child health services Objective 7: Expanded access to and Mostly Achieved Mostly Achieved improved quality of primary education in targeted, disadvantaged districts CLR Review For Official Use Only 9 Independent Evaluation Group Objective 8: Improved access to basic Achieved Mostly Achieved services and markets and community participation in rural areas Focus Area 4: (cross-cutting objective): Moderately Stronger Public Sector Management Unsatisfactory Objective 9: Strengthened government Partially Achieved Partially Achieved capacity for macroeconomic management and policy coordination Objective 10: Strong linkages between Mostly Achieved Partially Achieved planning, fiscal, borrowing strategy, and annual budgeting Objective 11: Improved financial Partially Achieved Partially Achieved management for appropriate revenue management 6. WBG Performance Lending and Investments 35. At the beginning of the CPS period, there were 17 IDA operations (including additional financing) under implementation for a total amount of $228 million covering a number of areas including forestry, poverty reduction, and rural electrification, with the largest single amount ($28 million) for a road sector project. During the CPS period IDA approved another 17 operations (including additional financings) for a total amount of $331 million, the largest were for power grid, poverty reduction fund and integrated water resource management. There were two development policy operations (DPOs- PRSO 8 and 9) for a total of $40 million. The approvals included seven unplanned operations (including three additional financings), while ten planned operations did not materialize. In addition, the program was also financed heavily by grants and trust funds. A total of 35 were active during the CPS period (some approved prior to FY12) for a total of $183 million, covering a wide range of activities including two from the Catalytic Fund EFA/FTI. Ten trust funded operations were above $5 million and four have been validated by IEG. 36. Portfolio performance at exit has been reasonably good. On the binary scale eleven out of 16 closed projects assessed by IEG were rated Moderately Satisfactory (MS) or better, and five Moderately Unsatisfactory or worse. The percentage of MS and above by number of operations was close to the average for the East Asia and Pacific region, but performance by amount was far below the regional average. This discrepancy between the two averages could possibly indicate a need to give special attention to larger operations in the country. It is also noted that the two DPOs were both Moderately Unsatisfactory by the region’s own self-assessment (ICR). The ratings for risk to development outcome were not particularly high – a majority (nine out of 16) were rated Moderate (with five rated Significant and two High). ISR ratings for projects under implementation seem however overall to be on the high side – for 20 projects six are rated Satisfactory and 14 Moderately Satisfactory, which could indicate a potential for some downgrading on completion. 37. Three previously approved IFC investment projects for a total of $20.8 million were committed pre-FY12 but were active during the FY12-16 CPS period. IFC also made five new investments during the period, with one cancellation, for a total amount of $32.5 million, of which 67 percent was allocated for three operations in the financial sector. The remainder was to support an FY14 operation in the health care sector. IFC’s total outstanding net investment exposure is now $29.5 million. IEG reviewed one Expanded Project Supervision Report (XPSR) and two Project Evaluation Summaries (PES) at project completion for investment projects, with development outcomes rated as Satisfactory, Unsuccessful, and Mostly Unsuccessful, respectively. MIGA did not issue any guarantees during the FY12-16 period. CLR Review For Official Use Only 10 Independent Evaluation Group Analytic and Advisory Activities and Services 38. During FY12-16, the Bank delivered 17 pieces of economic and sector work, spaced evenly over the period, including an expenditure review and an investment climate assessment. It also delivered 19 pieces of technical assistance, evenly distributed across sectors. Knowledge activities provided good support for the preparation and/or implementation of lending operations. 39. Eight IFC advisory service (AS) projects approved before the review period (for about $4.95 million) were active during the review period. During the CPS period, ten additional AS projects were approved for a total of $14.3 million, with all but one projects still in active status. The largest such project ($4.7 million) is supporting hydropower environmental and social performance standards, with other engagements for financial sector development (primarily investment climate reform and development of a credit bureau), forestry and a roads PPP project. IEG has provided two Evaluative Notes (EN) for AS projects, with the projects rated Mostly Successful and Unsuccessful, respectively. According to IEG’s validation, IFC was able to support the targeted reform and system upgrade of the country’s credit information system that was dysfunctional and inefficient prior to the IFC engagement. Two on-going AS projects experienced implementation delays due to lack of timely client resources. Results Framework 40. The results framework was largely stable throughout the CPS period, with only very modest changes in the CPSPR. Most indicators had quantitative baselines and targets. However, the program was probably too wide-ranging for a quite modest overall IDA envelope, even when including grants and trust funds, with 11 objectives and 27 indicators after the CPSPR. For some objectives, the underpinning indicators seemed inadequate, as indicated above. As one example, objective 1 sought strengthened government capacity to support growth diversification and competitiveness, but none of the three indicators measured government capacity to support growth diversification. In other cases, the link between program objectives and indicators and Bank interventions was tenuous and raises questions of attribution, as in the case of objectives under focus area 4. IFC was not included in the results framework in any meaningful way. A number of possible activities were listed, largely pro forma, and with unclear relations to the specific objectives. For example, under objective 1 (Strengthened Government Capacity) two IFC advisory projects were listed – access to SME finance and IFC trade guarantee and commercial loans to SMEs – both of which have little relevance for strengthening government capacity. Going forward the program needs to pay more attention to the regular recording and reporting of the indicators in the results matrix. Overall, the results framework could have been designed better. Partnerships and Development Partner Coordination 41. The CPS noted that the Bank had established strong partnerships with the government and other development partners, and that it aimed to deepen and broaden these further in order to help achieve the CPS objectives. At the time of the CPS, an increasing percentage of the portfolio was co- financed with other partners, and most of the analytical work was carried out jointly. The Bank at the time also intended to broaden its partner base to include emerging and non-traditional donors, and it would intensify partnerships with local institutions in carrying out its analytical work. The CLR states that a substantial number of IDA-financed projects have been co-financed or parallel-financed by other partners, while the WBG program benefitted from partnerships with a number of global trust funds in areas such as infrastructure, disaster risk reduction and education. Generally, the extensive use of partnerships and the Bank’s active role in the promotion and management of partnerships thus seems to have continued, but there are no references in the CLR to any progress in working with emerging and non-traditional donors. Safeguards and Fiduciary Issues 42. Safeguards. IEG validated 14 closed operations during the CPS period, for which safeguards aspects were reported in 13. Special attention was given in almost all sectors to ethnic minorities and Indigenous Peoples, when the policy on Indigenous Peoples (OP/BP 4.10) applied. In those projects, both the ICRs and the ICRRs reported proper application of informed consultations processes. However, in the Environment and Natural Resources sector, the ICR of the Sustainable Forestry for CLR Review For Official Use Only 11 Independent Evaluation Group Rural Development Project (P064886) reported moderately unsatisfactory compliance with the safeguard due to weak local capacity to engage with ethnic groups and especially women, and noted that adequate recommendations had been added to the design of a follow-up project. 43. The most recurring challenges during implementation were related to insufficient capacity on the ground and interagency coordination. (While not a safeguards issue, the transfer of funds from the center to provinces was also a recurring problem.) The ICRRs also reported periodic shortage of local environmental and social safeguard staff during operational missions. To address these constraints, the Bank team provided constant capacity building to project implementation units and local contractors. 44. Nam Theun 2. One project still under implementation is the Nam Theun 2 (NT2) Social and Environment Project (P049290). Given the high visibility of the NT2 project, the current situation regarding safeguards is discussed here. 1 A key lesson is that the Bank’s safeguard requirements for high risk operations can work, with the help of attentive Bank supervision, but that issues may require close attention throughout the life of a project. According to the Project Appraisal Document (PAD), the monitoring and evaluation framework included a provision for an independent review of key components by independent professional experts through the Dam Safety Review Panel (DSRP) and the Panel of Experts (POE). The POE is a permanent standing body for the period of the concession. At appraisal, the key safeguard issues were related to livelihoods restoration of the resettled people, protection of the watershed and the mitigation of downstream impacts of both the Xe Bang Fai and the Nam Theun rivers. During implementation, the CPSPR reported that although the wellbeing of resettled households had considerably improved, the remaining challenges (related to revenue management, law enforcement, fisheries and forestry regulation, biodiversity and watershed conservation) needed urgent government attention. The latest ISR and the CLR both indicated the successful construction of the hydropower scheme and high electricity and revenue generation. Both reports also noted the effective delivery of housing, health and education benefit to 6,300 resettled people, with only three percent of them receiving direct support from the project and the rest now being able to manage on their own. 45. However, concerns remained about the sustainability of their livelihoods. The ISR reported ambiguous conclusions on the effective livelihoods restoration of PAPs in the downstream areas, for which the Bank was conducting a review. The POE has recommended a two-year extension of the resettlement implementation period, primarily because of the sustainability concerns and the need for continuing support of the resettlers. In their latest report (September 2016), the POE found that the forestry sector (supposed to contribute to one third of resettlers’ livelihoods) had failed to meet expectations. The panel also noted considerable issues in terms of resource mismanagement, encroachments, lack of sense of ownership by the villagers, land grabbing, growing number of unresolved disputes and illegal use of land, partly due to poor understanding of community land use and right. All such challenges will require the Bank to exercise close monitoring until the closure of the Nam Theun 2 project. 46. Fiduciary. The CLR reports that overall procurement performance has been satisfactory, but that increased cases of fraud and corruption and conflicts of interest were observed during the CPS period. Investigations by INT concerning several contracts in a few WB-supported projects found instances of relatively weak capacity in project management oversight by the concerned implementing agencies with respect to issues of fraud and corruption. Contributing factors were relatively weak controls in those instances. Over the years, project-level efforts to build capacity, and a proactive government attitude, have resulted in improved systems and controls. During the CPS period (FY12- 16) INT received 13 complaints related to seven projects in the portfolio – including both IDA and trust funded operations. As a result of these complaints INT opened three cases and substantiated misconduct in one case that proceeded to the sanctions process, while in one case the problems were 1 The discussion in paras 44-45 was taken from the PAD and ISR (dated July 11, 2016) for the NT2 Social and Environment Project, and from the CPS and CPSPR, the CLR, and the latest report from the panel of experts (September 25, 2016). CLR Review For Official Use Only 12 Independent Evaluation Group fixed with the help of a positive government response. The complaints spanned a diverse range of sectors, but focused on issues related to construction and consultant contracts. Ownership and Flexibility 47. Neither the CPS nor the CPSPR say much about the WBG’s cooperation with the government or government entities, but this seems to have generally been reasonably good. The CLR notes the importance of considering political economy factors as drivers of government ownership and commitment. The most recent Client Opinion Survey (July-August 2015), as reported in the CLR, found that client perception of the WBG continued to be positive, with the WBG being perceived as a long-term development partner in the country, with strong collaboration with the government and other stakeholders. Perceptions of the WBG’s effectiveness and staff preparedness had improved significantly. WBG Internal Cooperation 48. The FY12-16 CPS was a joint Bank-IFC program that was prepared through joint consultations. (There was no MIGA activity in the country during this period.) However, IFC’s program as described in the CPS was largely aspirational, and was only very modestly reflected in the results matrix – which may possibly have underplayed the real amount of cooperation. The 2014 CPSPR noted that over the period FY12-14 the Bank and IFC had supported four joint projects, while four other projects involved close collaboration. For the remainder of the CPS period continued and further enhanced collaboration was expected in areas such as banking and finance, energy and hydropower, although this is not discussed in the CLR and seems to have materialized only in part. Risk Identification and Mitigation 49. The CPS discussed program risks at some depth, focusing on implementation risks (limited institutional capacity, and growing corruption problem) and weaknesses in the financial sector. The CPSPR also discussed risks from weaknesses in the government’s management of the macroeconomic framework, public finances, and risks to and from the country’s natural resource and environmental treasures. It noted some risks that continued to affect WBG interventions on developing the private sector – effectiveness and consistency in the implementation of laws and regulations, and that the pressures (both from within and outside) to exploit natural resources had been increasing rapidly. The CLR noted that critical risks to CPS implementation had been identified and successfully mitigated, including through the WBG leveraging its combined resources to support the government to improve the regulatory frameworks and strengthen budget oversight and support fiscal consolidation. The WBG and IMF also collaborated to strengthen the dialogue around the financial sector. Overall Assessment and Rating 50. Overall, IEG rates the WBG performance as Good. CPS Design: The program addressed important issues and priorities for the country, and was largely stable throughout the CPS period. The program noted the lessons from the previous programs, and reflected these to some extent. Thus, it recognized that capacity building needed to be approached differently – to be embedded within broader sectoral programs rather than through separate approaches or activities. The CPS also noted that the arguments in favor of greater selectivity were strong, but did not take account of this in the program design, and ended up with a program that was probably too wide-ranging and without sufficient depth. While the program was formally joint between the Bank and IFC, the latter was inadequately reflected in the results matrix. The largely stable results framework could also in some other ways have been designed better, as some underpinning indicators seemed inadequate, and some links between program objectives and indicators and Bank interventions were tenuous. The program complemented the IDA lending program with large amounts of grants and trust funds and substantial knowledge program, with the latter supporting the lending program. There was overall good consistency between lending operations and the supporting knowledge program. CLR Review For Official Use Only 13 Independent Evaluation Group CPS Implementation: During the CPS period IDA approved 17 operations (including additional financings) for a total amount of $331 million, with substantial modifications from planned to actual operations, and supported by numerous grants and trust funds. Knowledge activities provided good support for the preparation and/or implementation of lending operations, which have largely been proceeding well. There was in practice stronger Bank-IFC cooperation than reflected in the results framework. Portfolio performance at exit has been reasonably good, but with a difference between the average ratings by numbers and by amounts that could possibly indicate a need to give special attention to larger operations in the country. An extensive use of partnerships and the Bank’s active role in the promotion and management of partnerships continued during the CPS period. The most recurring safeguard challenges during implementation were related to insufficient capacity on the ground and interagency coordination. To address safeguard constraints, the Bank team provided constant capacity building to project implementation units and local contractors. There has also been strong attention to the still ongoing NT2 project. 7. Assessment of CLR Completion Report 51. The CLR is concise and well organized. It covers most important aspects and gives a balanced assessment of country issues and program performance. However, IEG found it difficult to validate some of the reported outcomes against the available documentation, and had to receive additional documentation from the team. The CLR is also unduly concise on some topics – such as on lending operations, the experiences at the operational level, and the expected cross-cutting capacity building aspects. There is also not even an attachment listing approved projects, there is no discussion of the reasons for the many dropped operations, and there is no discussion of the Bank’s role – if any – to help the government achieve the macroeconomic indicators. Finally, the CLR ratings are not fully in line with the shared approach: its overall outcome rating was based on the assessment of targets achieved, not based on the achievement of program objectives. 8. Findings and Lessons 52. IEG draws four main lessons:  Program design matters, with attention to focus and selectivity and to achieving development results. In this case the program was probably too broad, which may have been at the cost of in-depth impact.  Bank and IFC collaborations on specific operations can be useful to drive reforms forward, but need to be properly planned for and accounted for in the results frameworks.  It is preferable for results frameworks to incorporate all major areas of the program, and in reporting on results frameworks; it is important to ensure that all results, including numerical results, can easily be accounted for including for validation purposes. This was not always the case here.  From the still ongoing Nam Theun 2 social and environmental project, a lesson is that the Bank’s safeguard requirements for high risk operations can work, with the help of attentive Bank supervision, but issues may require close attention throughout the life of a project. 53. The CLR presents the following lessons with which IEG agrees, although some of the lessons seem more appropriate for specific operations:  Considering political economy factors as drivers of government ownership and commitment is critical for program design.  A strong consolidated program of ASA is a key strength of the CPS and highly valued by the client.  Presence and program leadership on the ground provide immediate and prompt response to client needs and emerging opportunities.  Engagement is critical in community-driven interventions, and it is as important as the provision of infrastructure. Annexes CLR Review 15 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives Annex Table 2: Lao PDR Planned and Actual Lending, FY12-FY16 Annex Table 3: Analytical and Advisory Work for Lao PDR, FY12-FY16 Annex Table 4: Lao PDR Grants and Trust Funds Active in FY12-16 Annex Table 5: IEG Project Ratings for Lao PDR, FY12-16 Annex Table 6: IEG Project Ratings for Lao PDR and Comparators, FY12-16 Annex Table 7: Portfolio Status for Lao PDR and Comparators, FY12-16 Annex Table 8: Disbursement Ratio for the Lao PDR, FY12-16 Annex Table 9: Net Disbursement and Charges for Lao PDR, FY12-16 Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Lao PDR Annex Table 11: Economic and Social Indicators for Lao PDR, 2012 – 2015 Annex Table 12: List of IFC Investments in Lao PDR Annex Table 13: List of IFC Advisory Services for Lao PDR Annex Table 14: IFC Net Commitment Activity in Lao PDR, FY12 - FY16 CLR Review Annexes 17 Independent Evaluation Group Annex Table 1: Summary of Achievements of CPS Objectives CPS FY12-FY16: Focus Area 1: Actual Results Competitiveness and IEG Comments (as of current month/year) Connectivity Objective 1: Strengthened government capacity to support growth diversification and competitiveness Indicator: (i) Mean number of days This outcome was supported by the Lao PDR Customs Sources: PLR, CLR, to import and Trade Facilitation Project (P101750, FY08 –ISR: ISR Baseline: 5.7 (2009) MS. 29-Sep-2016) and Lao PDR Second Trade Target: 2 (2015) Development Facility Project (P130512, FY13 – ISR: S. 03-Feb-2017 ). The CLR reports throughout 2009/15, the mean number of days to import went from 5.7 to 2.0. As of Feb. 3, 2017, the mean number of days to clear imports was 2.0. The target was met. Achieved Indicator: (ii) Percentage of According to the Lao PDR team, this objective was Source: PLR, CLR, inbound cargo subject to physical supported by the Customs and Trade Facilitation ISR, Data from the inspection Project (P101750, FY08 –ISR: MS. 29-Sep-2016). Lao Customs Baseline: 100 (2001) The CLR indicates that the percentage of cargos Department Target: 40 (2015) subject to inspection was reduced to 60 percent in 2013, and reached 52 percent in 2015. Data from the Lao Customs Department (provided by Major the Bank team) indicate that the number of cargo Outcome subject to physical inspection stood at 52 percent Measures between October 2013 and September 2014, then further dropped to 50 percent from October to July 2015. Mostly Achieved Indicator: (iii) Mean number of days This outcome was Sources: PLR, CLR, to obtain an operating license supported by the Lao PDR Second Trade Development ISR Baseline: 26.1 (2009) Facility Project (P130512, FY13 – ISR: S. 26-Dec-2016 Enterprise Survey, Target: 15 (2015) The CLR reports an increase from 17.7 days (2012) to Lao PDR 2016 16.3 days (2016). According to the 2016 Enterprise Survey for Lao PDR, the number of days to obtain operating license was 16.3. Mostly Achieved Objective 2: Increased access to improved infrastructure services in transport and energy Indicator: (i) Km of upgraded This outcome was supported by the Road Sector Source: PLR, CLR, national roads Project (P102398, FY10: ISR: S, 21-Sep-2016). ISR Baseline: 0 (2011) The CLR reports the indicator went from 130 to 171 Target: 171 (2015) km. As of May 2015, 171 km of national roads had been upgraded. Achieved CLR Review Annexes 18 Independent Evaluation Group CPS FY12-FY16: Focus Area 1: Actual Results Competitiveness and IEG Comments (as of current month/year) Connectivity Indicator: (ii) % of Provincial roads This outcome was supported by the Road Sector Source: PLR, CLR, in good and fair condition Project (P102398, FY10: ISR: S, 21-Sep-2016). ISR Baseline: 46% (2010) The CLR reports, the indicator went from 51 to 64 per Target: 60% (2015) cent of national roads. As of January 2016, 64 percent of provincial roads were in good and fair condition. Achieved Indicator: (iii) Number of new This outcome was supported by the Rural Sources : CLR, PLR, households electrified (grid and off Electrification Phase I (REPI) Project, P075531: IEG: CPS, ICR, ICRR grid) MS, and the Rural Electrification Phase II (REPII) Project, P110978 ICR: MS). The PLR reports a The CLR indicates a continued increase in household modification made to access to electricity from 80 to 90 percent during the the original indicator. CPS period. The targets were separated for REP1 REP (Rural Electrification Phase) I REP I: The ICRR reports that 66,879 households were and REP2. Target: 65,250 (2012) provided access to electricity in the targeted provinces through Grid extension and the Off-Grid Investment No baseline was Program. provided for REP I in the CLR and the PLR. REP II: As of June 2015, 47, 255 households were REP (Rural Electrification Phase) II electrified. The ICR further points that the target Baseline: 0 outcome was exceeded. Target: 37,700 (2015) Achieved CPS FY12-FY16: Focus Area 2 Actual Results Sustainable Natural Resources IEG Comments (as of current month/year) Management Objective 3: Strengthened Governance and Management of Hydropower and Mining Sectors, Including Nam Theun 2 Implementation Indicator: (i) Core standardized This outcome was supported by the TA for Capacity Sources: PLR, CLR, terms and conditions for hydropower Development in Hydropower and Mining Sector ICR, ISR and mining investment agreements (P109736 ISR: S 29-Sep-2016). adopted. The CLR reports the Standard Environment and Baseline: Current system Social Obligations (SESO) are still being improved, characterized by concession and a draft Mining Development Agreement has been Major agreements unique to each project developed. Outcome which differ significantly in terms and The latest ISR dated 29-Sept-2016 notes the revision Measures conditions (2011) of the Draft Mining Development Agreement (MDA) is Target: Government puts in place in progress. policies and regulations that provide On August 29, 2016, the MDA was submitted to GoL for core standardized conditions for approval. within concession agreements Partially Achieved (2015) Indicator: (ii) NT2’s resettlement This outcome was supported by the Nam Theun 2 Sources: PLR, CLR, implementation program Environment and Social Project (P076445, FY05, ISR: RAP Completion successfully concluded by 2015 MS, 11-Jul-2016) Report, ISR CLR Review Annexes 19 Independent Evaluation Group CPS FY12-FY16: Focus Area 2 Actual Results Sustainable Natural Resources IEG Comments (as of current month/year) Management Baseline: Relocation of all resettlers According to the CLR, 97 percent of the resettled Completed in 2008; livelihood households have reached the income target and 3 support programs underway. percent are currently receiving support. The ISR reports that all but 3 percent of resettlers Target: All resettler household have met the household income target incomes reach NT2 target of rural Mostly Achieved poverty line by 2014. Objective 4: Sustainable Environmental, Social and Water Resource Management Indicator: (i) Provincial departments Additional information provided by the team indicated Source: PLR, CLR, of NRE (PONRE) established and this outcome was supported by the Lao Environment ICRR, ISR functioning in selected provinces: and Social Project (P090693; IEG: U), and the Baseline: 0 (2011) Second Lao Environment and Social Project Target: 5 (2015) (P128393, FY14, Management: MS, 22-Dec-2016). The CLR reports the target as achieved, and PONRE (Provincial Office of Natural Resources and Environment) established in 17 provinces, “functioning” in 2013. The ICRR and the ICR report the establishment of PONRE in selected provinces and its support to manage environmental and social impacts. Achieved Indicator: (ii) % of Concession This outcome was supported by the Lao Environment Source: PLR, CLR, Agreements for hydropower projects and Social Project (P090693; IEG: U ) ICRR, ICR signed after the effectiveness of the The ICR reports that 21 hydropower Concession new EIA decree (March 2010) that Agreements were signed after 2010, and all contain include standardized environmental Standard Environment and Social Obligations and social requirements The number provided by the team could not be Baseline: 0 (2011) verified Target: 60% (2015) Achieved Indicator: (iii) Water Law (1996) This outcome was supported by the Mekong Source: PLR, CLR, revised and approved by 2015. Integrated Water Resources Management (P104806, ISR FY12 ISR: MS, 05-Nov-2016). The CLR reports the target as Partially Achieved. The ISR reports that in 2015 the water law had been revised (after it had been rejected in 2013), and is planned to be resubmitted in 2017. Partially Achieved Objective 5: Sustainable Management and Protection of Forests and Biodiversity Indicator: (i) Number of This outcome was supported by the Scaling-Up Source: CLR, PLR, management plans developed and Participatory Sustainable Forest Management ISR approved at national level for (P130222, FY13 ISR: MS 17-Dec-2016 ). National Protected Areas (NPA) and Production (PFA) and Protection The CLR reports the following values throughout Forest (PF) Areas 2013/16: 1 (NPA), 16 (PFA), 0 (PF) [2013] CLR Review Annexes 20 Independent Evaluation Group CPS FY12-FY16: Focus Area 2 Actual Results Sustainable Natural Resources IEG Comments (as of current month/year) Management Baseline: (2011) 1 (NPA);16 (PFA); 1 (NPA), 39 (PFA), 0 (PF) [2016]. 0 (PF) According to the latest ISR, the Forest Management Target: (2015) 3 (NPA); 20 (PFA); 2 Plan covered 40 of 41 Production Forest Areas (PF) (PFAs). No information is available for NAP and PF Partially Achieved Indicator: (ii) number/percentage of Additional information provided by the team indicated Source: PLR, CLR, signed and acknowledged this outcome was supported by the Scaling-Up ICRR, ISR Community agreements Participatory Sustainable Forest Management Baseline: (2011): 0 (NPA); 62 (P130222, FY13 ISR: MS 17-Dec-2016), and the (PFA), 0 (VFO) Sustainable Forestry for Rural Development (P064886, IEG: MU) Target: (2015) 50% of villages inside The target is reported in the CLR as not achieved with 2 NPAs; 105 (PFA); 800 (VFO) the following values: 2013: 0 (NPA); 65 (PFA); 723 (VFO); and in 2015: 0 (NPA), 65 (PFA), 723 (VFO) The indicator could not be verified in the evidence (intervention) provided by the team. Not achieved Indicator: (iii) Benefit-sharing This outcome was supported by the Sustainable Sources : PLR, CLR, mechanisms designed and Forestry for Rural Development Project, (P064886, ICRR, ICR implemented: IEG: MU) NPA PFA The ICRR reports the initial guidelines for revenue Baseline : (2011) 0 8 generation and benefit sharing were developed but Target : (2015) 50%* 20 villages not implemented Partially Achieved CPS FY12-FY16: Focus Area 3 Actual Results IEG Comments Inclusive Development (as of current month/year) Objective 6: Increased utilization and quality of essential maternal and child health services Indicator: (i) Percentage of births This outcome was supported by the Health Services Sources : PLR, CPS, attended by trained health personnel Improvement Project, P074027, IEG: MU. CLR, ICRR, WDI, Baseline: 16% (2005) 2015 UN country 35% (2010) The CLR reports the percentage of births attended by analysis report, Lao Target: 50% (2015) trained health personnel increased from 35 to 50 PDR’s District Health Major percent between 2010 and 2015, with a substantial Information System Outcome drop of 39 percent in the MMR. Measures The ICRR reports an increase of delivery from 24 to 39 percent between 2011/15. The World Development Indicators (WDI) and the 2015 UN country analysis report of the MDG for Lao show the percentage of births attended by skilled staff for the Lao PDR was 42 percent in 2012 CLR Review Annexes 21 Independent Evaluation Group CPS FY12-FY16: Focus Area 3 Actual Results IEG Comments Inclusive Development (as of current month/year) Additional information provided by the Bank team, from the Lao PDR’s District Health Information System shows the total of births delivered at a health facility and those delivered at home with the support of a Skilled Birth Attendant (SBA) in the provinces benefiting from Bank-financed HSIP project. In 2015, births in these provinces totaled approximately 64,850, for a percentage of births attended by trained personnel equal to 56.7 percent Given the additional information and taking into account other information, this indicator is Mostly Achieved. Mostly Achieved Objective 7: Expanded access to and improved quality of primary education in targeted, disadvantaged districts Indicator: (i) Primary completion This outcome was supported by the Second Source: PLR, CLR, rate in 56 targeted (disadvantaged) Education Development Project (P078113 IEG: MS), ICRR districts: and the Catalytic Fund EFA/FTI (P114609) (IEG: MS), Baseline: 54% (2008-9) and the Second Global Partnership for Education Target: 64% (2012-13) (P147469) (FY15-FY20). The CLR reports an increase in primary completion rates in 56 targeted disadvantaged districts from 54 percent in 2008/09 to 64 percent in 2012/13. For P078113, the ICRR reports primary completion rate in project areas increased from 55.0 percent in 2007/08 to 60.0 percent in 2011/12 For P114609, the ICRR reports the primary completion rate in project areas was 64 percent in 2010/11 Achieved Indicator: (ii) Number of students This outcome supported by the Catalytic Fund Source: PLR, CLR, enrolled in primary education in EFA/FTI (P114609 IEG: MS). ICRR targeted districts. The CLR reports the number of enrolled students Baseline: 314,044 (2008-9) increased from 321,620 in 2012/13 to 324,740 in 2015 326,389 (2010-11) of which 47.4 per cent are female. 339,216 (2011-12) IEG’s ICRR reports total enrollment in grades 1-5 in project districts increased from 306,626 in 2009 to Target: 353,000 (2012-13), of which 324,740 in 2013 (of which 47.4% female). 47% are female Mostly Achieved Indicator: (iii) System for Learning This outcome was supported by the Catalytic Fund Sources : PLR, CLR, Assessment fully operational by EFA/FTI, P114609; IEG: MS. ICRR, ICR 2013. The CLR reports the system was fully operational in 2013. Baseline: No (FY12) The ICRR reports the system was in place and Target: Yes (FY16) functional in 2012/13. Achieved CLR Review Annexes 22 Independent Evaluation Group CPS FY12-FY16: Focus Area 3 Actual Results IEG Comments Inclusive Development (as of current month/year) Objective 8: Improved Access to Basic Services and Markets, and Community Participation in Rural Areas Indicator: (i) Number of direct This outcome was supported by the Khammouane Source: PLR, CLR, beneficiaries of targeted programs Development Project, P087716 ICR: MS ICR Baseline: 0 (2008) The CLR reports 205,366 beneficiaries in 2016 (KDP Target: (revised, 2014): 184,000 only) The PLR reports the (2016) The ICR notes that in 2016 the targeted program target value was reached 232,927 beneficiaries. revised in 2014. The original target in the Achieved CPS included disaggregated percentage for ethnic minorities and females. Original indicator 20 (in the CPS):” % of poorest villages in participating provinces Reached” was dropped (PLR) Indicator: (ii) Increased production This outcome was supported by the Rice Productivity Source: PLR, CLR, of rice seed (R1, R2 and R3) in Improvement Project P114617, IEG: MS and ICRR participating areas P120909, Lao PDR Upland Food Security, IEG: S Baseline: 5,000 tons (2010) The CLR reports through 2012/15, the rice seed Target: 6,000 tons (2013) production went from 6,700 tons to 7,900 tons. The ICRR (project P114617) reports the seed centers produced a total of 2,690 tons of R1 and R2 seeds over 6 cropping seasons or an average of 896 tons per year. By completion of the Lao PDR Upland Food Security Project (P120909), the annual production volume of quality rice seed (R1 and R2 seed) reached 594 tons compared to a target of 574 tons and a baseline of 456 tons. The cumulative number of rice seeds for both projects is 3,284 tons. This is less than the numbers indicated in the CLR. Partially Achieved Indicator: (iii) Number of This outcome was supported by the Poverty Source: PLR, CLR, communities able to plan, implement Reduction Fund II P123480, ISR: S 06-Sep-2016 ISR and monitor their activities The CLR reports 278 villages successfully planned, implemented and monitored their activities. Year 1:182 (2012) [PRFII only] The ISR reports in 2015 the number of communities Year 2:270 (2013) [PRFII only] able to plan, implement and monitor their activities Year 3:270 (2014) [PRFII only] was 1124.00 Year 4:270 (2015) [PRFII only] The actual is greater than target. Achieved CLR Review Annexes 23 Independent Evaluation Group CPS FY12-FY16: Focus Area 3 Actual Results IEG Comments Inclusive Development (as of current month/year) Indicator: (iv) Adoption of Additional information provided by the team indicated Source: PLR, CLR, participatory planning processes by this outcome was supported by the Khammouane ISR, ICR, PRF Annual communities and district and Development Project (KDP) (P087716; ICR: MS), Progress Report provincial authorities Khammouane Development Project: additional Target: 105 (KDP+AF) + 270 financing (P127176) and the Poverty Reduction Fund Baseline not provided (PRFII) II (PRF) (P123480, ISR: S, 06-Sep-2016 / FY11, in the PLR nor in the P153401) CLR The CLR reports 278 Kun Bans (a group of villages) planned, implemented, and monitored their activities based on participatory planning processes. The PRF Annual Progress Report (provided by the team) supports that the adoption of participatory planning and monitoring processes was effective in 278 Kun Bans with 440 villages. The KDP ICR indicates that 185 investments were financed by the District Development Fund (DDF) in 300 villages for a total of 10 districts-wide investments. The DDF-benefited villages accounted for 52 percent of the Province’s 581 villages. Achieved CPS FY12-FY16: Cross-Cutting Actual Results Theme: Stronger Public Sector IEG Comments (as of current month/year) Management Objective 9: Strengthened Government Capacity for Macroeconomic Management and Policy Coordination Indicator: (i) budget deficit as a Additional information provided by the team indicated Source : PLR, CLR, percentage of GPD and Inflation this outcome was supported by the Eight Poverty CPS, PLR, IMF Article below rate of economic growth. Reduction Support (P125298), the Ninth Poverty 4 (2017) Target: Budget deficit less than 5% Reduction Support (P143025, ICR: MU), and the Lao GDP; Inflation below rate of Economic Monitor (P146673/P157829) No baseline or target economic growth. The February 2017 IMF Article 4 reports the budget in the CPS. Target deficit (grants included with other revenues) was below provided only in the 5 percent every year 2011-15 except for 2013, and with CLR and the PLR as little as 2.7 percent in 2015 (but are now projected to without timeframe Major increase to above 5 percent in 2016 and 2017), and indication. Outcome annual average CPI showed a declining trend (with a Measures jump in 2013) to 1.3 percent in 2015 (although now projected to increase again modestly). Achieved Indicator: (ii) CPIA Macroeconomic This outcome was supported by the Strengthening the Sources: CPS, PLR, management cluster improves National Statistical System (NSS) Project P129825, CLR, ISR, CPIA data Baseline (2011): 3.36 FY13, ISR: MS, 24-Jun-2016. Target: (2015): above 3.7 The CLR reports the value of the CPIA macroeconomic cluster remained at 3.3. The CPIA data show economic management cluster average for Lao were 3.333 in 2015. Not Achieved CLR Review Annexes 24 Independent Evaluation Group CPS FY12-FY16: Cross-Cutting Actual Results Theme: Stronger Public Sector IEG Comments (as of current month/year) Management Objective 10: Strong Linkages Between Planning, Fiscal, Borrowing Strategy, and Annual Budgeting Indicator: (i) Ensuring NSDEP8 is This outcome was supported by the Ninth Poverty Sources: PLR, CLR, anchored within a medium term Reduction Support Operation, P143025, ICR: MS. ICR budget framework The CLR reports a rudimentary macro-fiscal framework for 2016-2020 was produced in early 2016 and Baseline: No medium term budget approved by the National Assembly, framework 2011 The ICR, reports the indicator was partially met. In 2015, NSEDP 8 included a very basic framework. A Target: NSEDP8 contains a slightly more elaborate framework was presented to the National Assembly as part of the revised Budget medium term fiscal framework with preparation process. a discussion of medium term macro-fiscal outlook (2015). Partially Achieved Objective 11: Improved Financial Management for Appropriate Revenue Management Indicator: (i) Increase Revenue to This objective was supported by the Eight Poverty Sources : PLR, CLR, GDP Ratio Reduction Support (P125298); the Ninth Poverty ICR, IMF Article IV Baseline (2010): 15 % Reduction Support (P143025, ICR: MU) and the Lao (2017) Target (2015): 18 % or above. Economic Monitor (P146673/P157829) The CLR reports through 2014/15 the revenue to GDP ratio went from 18.5 percent, to 18.4 percent. The 2017 IMF Article IV reports total revenues and grants were 24 percent of GDP in 2015. Revenues net of grants were 19 percent. Achieved Indicator: (ii) Enhance fiscal This outcome was supported by the Public Finance Sources: PLR, CLR, transparency and external oversight Management Strengthening Program MDTF (P108787, ICRR Baseline: Summary of Audit Report IEG: MU and IFC Lao Tax Simplification Project. published but financial audit not The CLR reports the target as partially achieved with no comprehensive (2010) further evidence Target: Audit report for budget According to the ICRR: The government intended to execution covers entire central introduce a transparent set of rules and budget government and provincial allocation norms to guide allocation of funding to expenditures and published with subnational governments. Yet, no formal rules were key findings annually (2015). adopted by the time of project closure beyond the education sector. Not Achieved CLR Review Annexes 25 Independent Evaluation Group Annex Table 2: Lao PDR Planned and Actual Lending, FY12-FY16 Approved Proposed Approval Closing Proposed Proposed Outcome Project ID Project name IDA FY FY FY Amount Amount Rating Amount Project Planned Under CPS/CPSPR 2012-2016 CPS CPSPR Revenue Administration DROPPED Project FY12-14 8.6 Road Sector Project P129347 Additional Financing FY12-14 2013 21 21 Integrated provincial DROPPED Infrastructure Project FY12-14 Hydropower and Mining TA P148755 Additional Finance FY12-14 2014 18.9 17.8 Mekong Integrated Water P104806 Resource Management FY12-14 2012 2018 18 26 LIR: MS Lao Environmental Management Project 2 / DROPPED LENS 2 FY12-14 FIP Scaling Up Participatory Sustainable Forest P130222 Management FY12-14 2013 2019 19 19 LIR: MS Strengthening Protection for DROPPED Wildlife and Protected Areas FY12-14 17 Khammoune Development P127176 Project AF FY12-14 2012 8.6 8.6 P145544 Early Childhood Education FY12-14 2014 2020 28 28 LIR: MS P125298 Lao PDR PRSO 8 FY12-14 2013 2013 20 P143025 Lao PDR PRSO 9 FY12-14 2014 2014 20 Public Financial DROPPED Management Project FY12-14 IDA Power Grid P149599 Improvement Project - FY15 2015 2020 30 30 LIR: S IDA Environnemental DROPPED Management FY15 15 Global Partnership for DROPPED Education/GPE2 - FY15 16.8 IDA Maternal Health and DROPPED Nutrition - FY16 30 IDA Poverty Reduction Fund P157963 AF or III FY16 2016 2020 25 30 LIR: S IDA Poverty Reduction DROPPED Support Operations FY15-16 IDA Public Finance DROPPED Management FY16 Total Planned 255.9 220.4 Unplanned Projects during the CPS/CPSPR Period Lao Health Governance and P151425 Nutr.Dev.Proj 2015 2021 26.4 LIR: MS 2nd Lao Env and Social P152066 (Add. Fin. PAW) 2015 15 CLR Review Annexes 26 Independent Evaluation Group LA-Poverty Reduction Fund P153401 II - AF 2015 11.6 Second Lao Environment & P128393 Social Project 2014 2021 17 LIR: MS Lao PDR SME Access to P131201 Finance 2014 2019 20 LIR: MS Lao PDR Trade P130512 Development Facility 2 2013 2017 4 LIR: S Lao PDR CTFP Additional P144992 Financing 2013 6.5 Total Unplanned 100.5 Approval Closing Approved On-going Projects during the CPS/CPSPR Period FY FY Amount P122847 Lao PDR PRSO 7 2011 2012 10 LA-Poverty Reduction Fund P123480 II 2011 2017 25 LIR: S P124906 LA: HSIP (AF) 2011 10 P102398 LA-Road Sector Project 2010 2018 28 LIR: S LA-Rural Electrification P110978 Phase II 2010 2015 20 LIR: MS LA-Upland Food Security P120909 Improvement Proj 2010 2015 10 LIR: MS LA-Khammouane P087716 Development Project 2008 2016 9 LIR: MS Lao PDR Customs and P101750 Trade Facilitation 2008 2017 6 LIR: MS LA - GMS Power Trade P105331 Project 2007 2015 15 LIR: MS LA-Health Services P074027 Improvement Project 2006 2016 15 LIR: MS LA-Rural Electrification P075531 Phase I 2006 2012 10 IEG: MS LA-Avian and Human P100081 Influenza Control 2006 2012 4 LIR: S Lao Environment and Social P090693 Project 2005 2013 4 IEG: U LA - Nam Theun Social & P049290 Environment 2005 2018 20 LIR: MS LA-Second Education P078113 Development 2004 2014 13 IEG: MS LA-SUSTAINABLE FORESTRY FOR RURAL P064886 DEV. 2003 2013 10 IEG: MU LA-Poverty Reduction Fund P077326 Project 2002 2012 19 LIR: MS Total On-going 228 Source: Lao PDR CPS and CPSPR, WB Business Intelligence Table 2a.1, 2a.4 and 2a.7 as of 11/29/16 *LIR: Latest internal rating. MU: Moderately Unsatisfactory. MS: Moderately Satisfactory. S: Satisfactory. HS: Highly Satisfactory. CLR Review Annexes 27 Independent Evaluation Group Annex Table 3: Analytical and Advisory Work for Lao PDR, FY12-FY16 Proj ID Economic and Sector Work Fiscal year Delivered Output Type P116395 LaoPDR Investment Climate Assessment2009 FY12 Investment Climate Assessment (ICA) P128011 Laos Economic Monitor FY2012 FY12 Sector or Thematic Study/Note P130298 Transport Sector Enabling Env Assessment FY13 Sector or Thematic Study/Note P143570 Update Public Expenditure Review FY13 Public Expenditure Review (PER) P144126 Baseline Survey Report for CNP FY13 Sector or Thematic Study/Note P125045 Lao PDR TTFA FY14 Sector or Thematic Study/Note P126867 LAO - Skills and Knowledge FY14 Sector or Thematic Study/Note P131089 LA-School Based Management Study FY14 Sector or Thematic Study/Note P132641 Lao Economic Monitor FY2013 FY14 Sector or Thematic Study/Note P143433 Out-of-Pocket Expenditures on MCH FY14 Sector or Thematic Study/Note P129902 Lao Development Report 2014 FY15 Sector or Thematic Study/Note P133659 Lao PDR ICA 2014 Update FY15 Investment Climate Assessment (ICA) P146673 Laos Economic Monitor FY13-FY14 FY16 Sector or Thematic Study/Note P150968 Services-Manufacturing Linkages FY16 Sector or Thematic Study/Note P150969 Incidence and impact of NTMs FY16 Sector or Thematic Study/Note P150970 Trade and Employment Linkages FY16 Sector or Thematic Study/Note P157829 Lao Economic Monitor FY15-16 FY16 Sector or Thematic Study/Note Proj ID Technical Assistance Fiscal year Delivered Output Type P111149 Lao PDR: Post Disaster Needs Assessment FY12 Technical Assistance P115251 Lao PDR Trade SWAp Implementation TA FY12 Technical Assistance P116372 Lao PDR Export Competitiveness TA FY12 Technical Assistance P127954 Laos Food Security Strategy TA FY12 Technical Assistance P120599 LA - Adolescent Girls Initiative (Ph 1) FY13 Technical Assistance P125044 Lao PDR DTIS Update and WTO Accession FY13 Technical Assistance P127513 Lao NT2 and RMA FY13 Technical Assistance P125502 LA - KTF Skilled Workforce Study FY14 Technical Assistance P128597 Lao PDR #10119 Improv Effic of Paymt Sys FY14 Technical Assistance P130772 Lao PDR National Single Window FY14 Technical Assistance P131816 Lao-Adolescent Girls Initiatives (Ph 2) FY14 Technical Assistance P143169 Lao PDR: NT2 RMA FY14 Technical Assistance P132249 Strengthen Lao WASH Sector Coordination FY15 Technical Assistance P143997 Lao PDR: Health Human Resource Study FY15 Technical Assistance P146729 Lao PDR: NT2 Revenue Management Arrangem FY15 Technical Assistance P130355 Clean Stove Initiative for EAP-Lao PDR FY16 Technical Assistance P132368 Sanitation Marketing in Lao PDR FY16 Technical Assistance P146141 Lao PDR Poverty Measurement & Monitoring FY16 Poverty Assessment (PA) P151272 Strengthening health financing for UHC FY16 Technical Assistance Source: WB Business Intelligence 11/23/16 CLR Review Annexes 28 Independent Evaluation Group Annex Table 4: Lao PDR Grants and Trust Funds Active in FY12-16 Approval Closing Approved Outcome Project ID Project name TF ID FY FY Amount Rating P149130 Second Global Partnership for Education TF 18969 2015 2020 16,800,000 LIR: MS Second Lao Environment & Social Project P128393 (Phase 4 Horizontal Reg. APL Strengthening TF 16619 2014 2021 6,830,000 LIR: MS Regional Coop. for Wildlife Protection in Asia) P144268 LAO PDR: Building Resilience to Natural Disasters TF 15147 2014 2016 640,000 LA-Scaling-Up Participatory Sustainable Forest P130222 TF 15286 2014 2019 12,830,000 LIR: MS Management P125082 LA - FCPF Readiness Grant TF 14777 2014 2017 3,600,000 LAOSTAT-STRENGTHENING THE NATIONAL P129825 TF 14613 2013 2017 8,000,000 LIR: MS STATISTICAL SYSTEM PROJECT Lao PDR Second Trade Development Facility P130512 TF 14189 2013 2017 9,900,000 LIR: S Project LA-Nam Et-Phou Louey Tiger Landscape P113860 TF 13181 2013 2017 879,000 Conservation Project P123480 LA-Poverty Reduction Fund II TF 12419 2013 2017 14,500,000 LIR: S LA-Scaling-Up Participatory Sustainable Forest P130222 TF 11624 2012 2014 500,000 Management Lao PDR - Mainstreaming Disaster and Climate P129182 TF 11271 2012 2016 2,718,000 Risk Management into Investment Decisions P114609 Catalytic Fund EFA/FTI TF 99625 2012 2015 21,773,064 IEG: MS TA for Capacity Development in Hydropower and P109736 TF 99572 2012 2014 2,542,397 Mining Sector P074027 Health Services Improvement Project TF 10518 2012 2016 2,400,000 GEF Project: Lao Rural Electrification Phase II P117177 TF 98662 2011 2015 1,818,000 Project P125660 LA - Forest Investment Program Preparation Grant TF 98977 2011 2012 227,900 Lao PDR: Post-Ketsana Community Driven P122340 TF 97714 2011 2012 410,000 Disaster Recovery Lao PDR Sustainable Silk Production Partnership P124640 in Rural Lao PDR (Trade Development Facility TF 98229 2011 2015 1,876,200 JSDF) Lao PDR Mobilizing Ethnic Communities for P123891 TF 97786 2011 2016 2,621,500 Improved Livelihoods and Wellbeing P120495 Community Nutrition Project EU Funding TF 97071 2011 2012 1,773,508 P114609 Catalytic Fund EFA/FTI TF 97384 2011 2015 30,000,000 IEG: MS Rural Electrification Phase I Project of the Rural P075531 TF 96084 2011 2013 9,420,000 IEG: MS Electrification (APL) Program Lao PDR Upland Food Security Improvement P120909 TF 97058 2010 2012 4,099,361 Project P102398 Road Sector Project TF 93083 2010 2015 1,000,000 P120468 Lao PDR: Introducing Public Opinion Surveys TF 97096 2010 2013 169,962 P114863 Community Nutrition Project TF 95274 2010 2014 2,000,000 SUSTAINABLE FORESTRY FOR RURAL P064886 TF 95057 2010 2014 500,000 DEVELOPMENT PROJECT CLR Review Annexes 29 Independent Evaluation Group Approval Closing Approved Outcome Project ID Project name TF ID FY FY Amount Rating P104806 Mekong Integrated Water Resources Management TF 93258 2009 2013 918,000 P114617 LAO PDR: Rice Productivity Improvement Project TF 93614 2009 2012 3,000,000 P106165 Lao PDR Trade Development Facility Project TF 91201 2009 2013 6,815,855 IEG: MS Public Finance Management Strengthening P108787 TF 91192 2009 2014 3,862,993 Program MDTF P087716 LA-Khammouane Development Project TF 92394 2009 2014 985,000 Avian and Human Influenza Control and P100081 TF 57185 2007 2012 2,000,000 Preparedness Project Avian and Human Influenza Control and P100081 TF 56737 2007 2012 2,000,000 Preparedness Project Rural Electrification Phase I Project of the Rural P080054 TF 56700 2006 2012 3,750,000 Electrification (APL) Program Total 183,160,740 Source: Client Connection as of 11/23/16 ** IEG Validates RETF that are 5M and above CLR Review Annexes 30 Independent Evaluation Group Annex Table 5: IEG Project Ratings for Lao PDR, FY12-16 Total Exit FY Proj ID Project name IEG Outcome IEG Risk to DO Evaluated ($M) LA-SUSTAINABLE FORESTRY FOR MODERATELY SIGNIFICANT 2012 P064886 RURAL DEV. 21.4 UNSATISFACTORY MODERATELY MODERATE 2012 P075531 LA-Rural Electrification Phase I 10.6 SATISFACTORY 2012 P077326 LA-Poverty Reduction Fund Project 36.9 UNSATISFACTORY MODERATE LA-Avian and Human Influenza SATISFACTORY HIGH 2012 P100081 Control 4.0 LAO PDR: Rice Productivity MODERATELY SIGNIFICANT 2012 P114617 Improvement 0.0 SATISFACTORY MODERATELY MODERATE 2012 P122847 Lao PDR PRSO 7 9.9 SATISFACTORY 2013 P090693 Lao Environment and Social Project 7.1 UNSATISFACTORY SIGNIFICANT MODERATELY MODERATE 2013 P106165 Lao PDR Trade Development Facility 0.0 SATISFACTORY MODERATELY MODERATE 2014 P078113 LA-Second Education Development 27.3 SATISFACTORY MODERATELY HIGH 2014 P108787 LA-Public Fin. Mgnt . Streng MDTF 0.0 UNSATISFACTORY FPCR TF for Lao PDR on Nutrition: MODERATELY MODERATE 2014 P114863 CNP 0.0 SATISFACTORY MODERATELY MODERATE 2015 P105331 LA - GMS Power Trade Project 9.6 SATISFACTORY MODERATELY MODERATE 2015 P114609 LA-Catalytic Fund EFA/FTI 0.0 SATISFACTORY LA-Upland Food Security SATISFACTORY SIGNIFICANT 2015 P120909 Improvement Proj 10.1 2015 P110978 LA-Rural Electrification Phase II 17.5 SATISFACTORY SIGNIFICANT LA-Health Services Improvement MODERATELY MODERATE 2016 P074027 Project 25.7 UNSATISFACTORY Total 180.1 Source: AO Key IEG Ratings as of 02/06/17 Annex Table 6: IEG Project Ratings for Lao PDR and Comparators, FY12-16 RDO % RDO % Total Total Outcome Outcome Region Moderate or Lower Moderate or Lower Evaluated ($M) Evaluated (No) % Sat ($) % Sat (No) Sat ($) Sat (No) Lao PDR 180.1 16 49.4 8.8 66.7 56.3 EAP 17,339.5 191 77.3 70.0 70.2 54.7 World 95,938.7 1,121 83.4 71.0 60.4 46.4 Source: WB AO as of 02/06/17 CLR Review Annexes 31 Independent Evaluation Group Annex Table 7: Portfolio Status for Lao PDR and Comparators, FY12-16 Fiscal year 2012 2013 2014 2015 2016 Ave FY12-16 Lao PDR # Proj 18 19 22 20 16 19 # Proj At Risk 3 6 7 4 3 5 % Proj At Risk 16.7 31.6 31.8 20.0 18.8 24.2 Net Comm Amt 263.4 308.1 405.1 394.3 390.7 352 Comm At Risk 33.0 89.6 84.2 45.3 64.8 63 % Commit at Risk 12.5 29.1 20.8 11.5 16.6 18.0 EAP # Proj 357 351 354 344 337 349 # Proj At Risk 58 66 65 70 56 63 % Proj At Risk 16.2 18.8 18.4 20.3 16.6 18.1 Net Comm Amt 30,381.1 30,542.3 31,852.5 32,386.0 33,346.1 31,702 Comm At Risk 3,339.1 5,089.2 5,270.3 6,412.3 4,776.1 4,977 % Commit at Risk 11.0 16.7 16.5 19.8 14.3 15.7 World # Proj 2,029 1,964 2,048 2,022 1,975 2,008 # Proj At Risk 387 414 412 444 422 416 % Proj At Risk 19.1 21.1 20.1 22.0 21.4 20.7 Net Comm Amt 173,706.1 176,202.6 192,610.1 201,045.2 220,331.5 192,779 Comm At Risk 24,465.0 40,805.6 40,933.5 45,987.7 44,244.9 39,287 % Commit at Risk 14.1 23.2 21.3 22.9 20.1 20.4 Source: WB BI as of 11/23/16 CLR Review Annexes 32 Independent Evaluation Group Annex Table 8: Disbursement Ratio for the Lao PDR, FY12-16 Fiscal Year 2012 2013 2014 2015 2016 Overall Result Lao PDR Disbursement Ratio (%) 33.3 47.6 32.8 23.3 24.0 31.1 Inv Disb in FY 63.3 64.1 51.3 40.6 52.5 271.8 Inv Tot Undisb Begin FY 190.0 134.8 156.3 174.5 218.8 874.5 EAP Disbursement Ratio (%) 22.8 19.6 19.9 20.5 19.6 20.5 Inv Disb in FY 3,975.1 3,232.8 3,539.6 3,670.3 3,797.6 18,215.3 Inv Tot Undisb Begin FY 17,421.6 16,461.7 17,830.8 17,923.6 19,399.7 89,037.4 World Disbursement Ratio (%) 20.8 20.6 20.8 21.8 19.5 20.7 Inv Disb in FY 21,048.2 20,510.7 20,757.7 21,853.7 21,152.9 105,323.2 Inv Tot Undisb Begin FY 101,234.3 99,588.3 99,854.3 100,344.9 108,600.3 509,622.0 * Calculated as IBRD/IDA Disbursements in FY / Opening Undisbursed Amount at FY. Restricted to Lending Instrument Type = Investment. AO disbursement ratio table as of 11/28/16 Annex Table 9: Net Disbursement and Charges for Lao PDR, FY12-16 Period Disb. Amt. Repay Amt. Net Amt. Charges Fees Net Transfer FY12 48,550,475.1 18,192,573.8 30,357,901.3 - 5,256,568.6 25,101,332.7 FY13 66,207,332.5 19,649,800.7 46,557,531.8 - 4,913,784.0 41,643,747.9 FY14 58,521,075.6 21,098,347.1 37,422,728.4 - 4,735,477.3 32,687,251.1 FY15 37,779,973.1 21,484,894.0 16,295,079.2 - 4,436,786.5 11,858,292.7 FY16 47,154,708.8 21,285,415.2 25,869,293.6 - 4,060,509.0 21,808,784.6 Report Total 258,213,565.1 101,711,030.8 156,502,534.3 - 23,403,125.3 133,099,408.9 World Bank Client Connection 11/23/16 CLR Review Annexes 33 Independent Evaluation Group Annex Table 10: Total Net Disbursements of Official Development Assistance and Official Aid for Lao PDR Development Partners 2012 2013 2014 2015 Australia 53.85 49.22 52.81 .. Austria 1.3 0.37 1.41 .. Belgium 2.38 0.94 1.81 .. Canada 1.45 0.72 1.1 .. Czech Republic 0 0.01 0.02 0 Denmark 0.59 .. .. .. Finland 10.06 7.6 8.32 .. France 14.68 16.93 13.4 .. Germany 31.52 25.84 29.42 .. Ireland .. 0.66 0.66 .. Italy 0.41 0.1 0.21 .. Japan 88.43 75.96 103.33 .. Korea 23.52 27.07 28.98 .. Luxembourg 16.69 17.76 17.6 .. Netherlands .. .. .. .. New Zealand 4.94 4.55 5.25 .. Norway 4.4 5.66 7.13 .. Poland 0.01 0.03 0.03 .. Spain .. .. 0.09 .. Sweden -0.71 -0.73 -0.35 -0.59 Switzerland 20.72 24.55 20 .. United Kingdom 1.47 1.48 2.42 .. United States 8.55 9.34 18.42 .. DAC Countries, Total 284.26 268.06 312.06 -0.59 AsDB Special Funds 21.64 31.74 35.52 .. EU Institutions [EU] 13.15 10.59 16.57 .. Food and Agriculture Organisation [FAO] .. 0.11 .. .. Global Alliance for Vaccines and Immunization [GAVI] 2.12 4.27 8.95 1.36 Global Environment Facility [GEF] 1.8 2.45 2.91 .. Global Fund 12.86 11.94 10.8 8.23 International Atomic Energy Agency [IAEA] .. .. 0.18 0.09 International Bank for Reconstruction and Development [IBRD] .. .. .. .. International Development Association [IDA] 47.55 43.58 14.63 .. IFAD 5.78 5.09 6.85 .. International Finance Corporation [IFC] .. .. .. .. International Labour Organisation [ILO] 0.39 0.33 .. .. IMF (Concessional Trust Funds) -3.47 -1.38 .. .. Nordic Development Fund [NDF] -1.12 -1.15 -1.78 -1.81 OPEC Fund for International Development [OFID] -0.42 -1.31 -1.42 .. UNAIDS 0.49 0.27 .. 0.08 UNDP 4.14 4.15 3.63 2.48 UNFPA 1.8 2.64 2.47 2.29 UNICEF 2.12 2.34 2.49 2.65 WFP 0.39 0.84 0.72 0.12 World Health Organisation [WHO] 1.6 1.33 1.13 2.27 Multilateral, Total 110.82 117.83 103.65 17.76 Hungary 0.02 0.52 0.29 .. Israel 0.02 .. .. 0 Kuwait (KFAED) .. 0.08 0.2 2.11 CLR Review Annexes 34 Independent Evaluation Group Development Partners 2012 2013 2014 2015 Russia 0.23 .. .. .. Thailand 13.76 34.72 55.45 41.15 Turkey 0.07 0.13 0.05 .. United Arab Emirates 0.02 0.03 0.68 .. Non-DAC Countries, Total 14.12 35.48 56.67 43.26 Development Partners Total 409.2 421.37 472.38 60.43 Source: OECD Stat, [DAC2a] as of 11/28/16 Annex Table 11: Economic and Social Indicators for Lao PDR, 2012 – 2015 Lao SEA World Series Name 2012 2013 2014 2015 Average 2012-2015 Growth and Inflation GDP growth (annual %) 8.0 8.5 7.5 7.0 7.8 4.3 2.5 GDP per capita growth (annual %) 6.3 6.7 5.8 5.2 6.0 3.6 1.3 GNI per capita, PPP (current international $) 4,280.0 4,680.0 5,070.0 5,380.0 4,852.5 14,517.3 14,729.9 GNI per capita, Atlas method (current US$) (Millions) 1,300.0 1,490.0 1,640.0 1,730.0 1,540.0 9,463.3 10,595.9 Inflation, consumer prices (annual %) 4.3 6.4 4.1 1.3 4.0 2.5 2.7 Composition of GDP (%) Agriculture, value added (% of GDP) 28.1 26.4 27.7 27.2 27.3 5.5 3.9 Industry, value added (% of GDP) 36.0 33.2 31.4 30.9 32.9 34.7 28.0 Services, etc., value added (% of GDP) 35.9 40.4 40.9 41.9 39.8 59.7 68.1 Gross fixed capital formation (% of GDP) 31.6 29.2 30.1 32.9 30.9 31.7 23.3 Gross domestic savings (% of GDP) 21.8 20.3 20.9 23.6 21.6 33.7 24.5 External Accounts Exports of goods and services (% of GDP) 38.8 37.3 40.5 34.8 37.9 31.9 30.2 Imports of goods and services (% of GDP) 48.7 46.1 49.7 44.2 47.2 30.4 29.6 Current account balance (% of GDP) (4.4) (3.4) (10.1) (18.4) -9.0 External debt stocks (% of GNI) 93.3 89.3 95.9 .. 92.8 Total debt service (% of GNI) 3.0 3.1 3.2 .. 3.1 Total reserves in months of imports 4.3 3.4 3.0 2.0 3.2 15.1 13.3 Fiscal Accounts /1 General government revenue (% of GDP) 24.108 23.924 23.239 23.109 23.0 CLR Review Annexes 35 Independent Evaluation Group General government total expenditure (% of GDP) 24.616 29.553 27.766 26.004 26.0 General government net lending/borrowing (% of GDP) -0.508 -5.629 -4.527 -2.895 -3.0 General government gross debt (% of GDP) 62.191 60.127 63.037 62.954 61.7 Health Life expectancy at birth, total (years) 65.2 65.7 66.1 .. 65.7 74.7 71.2 Immunization, DPT (% of children ages 12-23 months) 79.0 87.0 88.0 89.0 85.8 92.9 85.3 Improved sanitation facilities (% of population with access) 64.6 67.6 70.5 70.9 68.4 75.9 66.7 Improved water source (% of population with access) 64.9 67.1 69.4 69.4 67.7 88.4 83.4 Mortality rate, infant (per 1,000 live births) 55.4 53.7 52.3 50.7 53.0 15.2 33.2 Education School enrollment, preprimary (% gross) 24.3 27.0 30.4 .. 27.2 69.2 53.5 School enrollment, primary (% gross) 120.1 118.9 116.3 .. 118.4 116.7 108.2 School enrollment, secondary (% gross) 47.8 51.7 57.2 .. 52.3 85.6 74.6 Population Population, total (Millions) 6,473,050 6,579,985 6,689,300 6,802,023 6,636,090 2,256,526,980 7,218,239,265 Population growth (annual %) 1.7 1.6 1.6 1.7 1.7 0.7 1.2 Urban population (% of total) 35.4 36.5 37.6 38.6 37.0 55.2 53.2 Source: DDP as of 10/21/16 *International Monetary Fund, World Economic Outlook Database, October 2016 CLR Review Annexes Independent Evaluation Group 36 Annex Table 12: List of IFC Investments in Lao PDR Investments Committed in FY12-FY16 Primary Loan Equity Project Cmt Project Greenfield Project Original Original Original Loan Equity Net Net Net Sector Risk Risk ID FY Status Code Size Loan Equity CMT Cancel Cancel Loan Equity Comm Name Rating Rating Finance & 36292 2016 Active G 9,000 8,993 - 8,993 - - 8,993 - 8,993 4A Insurance Finance & 32726 2015 Active G 5,000 5,000 - 5,000 - - 5,000 - 5,000 3B Insurance Health 32557 2014 Active G 20,000 10,500 - 10,500 - - 10,500 - 10,500 4A Care Finance & 32982 2013 Closed G 8,000 8,000 - 8,000 - - 8,000 - 8,000 4A Insurance Electric 32326 2012 Closed E 2,000 2,000 - 2,000 1,993 - 7 - 7 4B Power Sub-Total 44,000 34,493 - 34,493 1,993 - 32,500 - 32,500 Investments Committed pre-FY12 but active during FY12-16 Loan Equity Project CMT Project Primary Sector Greenfield Project Original Original Original Loan Equity Net Net Net Risk Risk ID FY Status Name Code Size Loan Equity CMT Cancel Cancel Loan Equity Comm Rating Rating 28141 2011 Active Electric Power G 15,000 15,000 - 15,000 - - 15,000 - 15,000 5B Finance & 26389 2009 Active G 1,835 - 1,833 1,833 - 1 1,833 1,832 1,832 4A Insurance Accommodation 27914 2009 Active & Tourism G 12,000 4,000 - 4,000 - - 4,000 - 4,000 4A Services Sub-Total 28,835 19,000 1,833 20,833 - 1 20,833 1,832 20,832 TOTAL 72,835 53,493 1,833 55,326 1,993 1 53,333 1,832 53,332 Source: IFC-MIS Extract as of end July 31, 2016 CLR Review Annexes 37 Independent Evaluation Group Annex Table 13: List of IFC Advisory Services for Lao PDR Advisory Services Approved in FY12-16 Impl Impl Primary Project ID Project Name Start End Project Status Business Total Funds, US$ FY FY Line 601396 Lao PDR Investment Climate Reform 2017 2020 ACTIVE TAC 2,000,000 600450 Lao Credit Bureau Phase 2 2016 2020 ACTIVE FAM 1,159,453 600525 Lao Secured Transactions Phase 2 2016 2019 ACTIVE FAM 975,288 600826 Lao PDR Digital Finance 2016 2017 ACTIVE FIG 250,000 600296 GHB Coffee Supply Chain Lao 2015 2016 TERMINATED MAS 780,190 600156 Lao Roads PPP 2014 2018 ACTIVE CAS 1,418,325 600269 Lao Payment System 2014 2018 ACTIVE FAM 842,025 Lao PDR Hydropower Environmental & 589087 2013 2017 ACTIVE ESG 4,729,898 Social Performance Standards 594367 Lao Forestry 2013 2017 ACTIVE MAS 1,581,864 586507 Lao Licensing Reform 2012 2016 ACTIVE TAC 595,194 Sub-Total 14,332,237 Advisory Services Approved pre-FY12 but active during FY12-16 Impl Impl Primary Project ID Project Name Start End Project Status Business Total Funds, US$ FY FY Line 579207 Lao Payment System 2011 2014 HOLD FAM 75,401 564488 Lao Credit Bureau 2010 2012 CLOSED A2F 245,500 570747 Lao Tax Simplification 2010 2016 ACTIVE TAC 1,926,109 561327 Lao Secured Transactions 2009 2014 CLOSED FAM 1,513,101 570867 Lao Hydro Renewable Energy 2009 2012 CLOSED PPP 388,448 558845 BEE-LS Investment Law 2008 2012 CLOSED IC 433,322 Sub-Total 4,581,881 TOTAL 18,914,118 Source: IFC AS Data as of 7-31-16 Annex Table 14: IFC Net Commitment Activity in Lao PDR, FY12 - FY16 2012 2013 2014 2015 2016 Total Financial Markets 1 8,000,021 (662) 5,000,000 8,993,374 21,992,734 Trade Finance (TF) - - 574,647 - - 574,647 Health, Education, Life Sciences - - 10,500,000 - - 10,500,000 Infrastructure Electric Power 2,000,000 - - - (1,993,245) 6,755 Total 2,000,001 11,073,985 5,000,000 7,000,129 33,074,136 Source: IFC MIS as of 11/29/16